April 21, 1999

SIXTEEN CHARGED WITH FILING FRAUDULENT WORKERS' COMPENSATION CLAIMS; DEFENDANTS SOUGHT DISABILITY BENEFITS WHILE CONTINUING TO WORK OR CASHED BENEFIT CHECKS OF DECEASED RELATIVES; OTHERS CHARGED WITH PROVIDING FALSE INSURANCE CERTIFICATES AND THEFT OF PREMIUMS.

Queens District Attorney Richard A. Brown, joined by Superintendent of Insurance Neil D. Levin and officials of the New York State Insurance Fund and the Workers' Compensation Board's Inspector General's Office and representatives of some of nation's largest insurance companies, announced today the arrest of approximately 20 individuals on charges of bilking the State Insurance Fund and various commercial insurance carriers of over $300,000 in workers' compensation benefits by falsely claiming they were disabled, cashing benefit checks issued to deceased relatives and by other schemes.

District Attorney Brown said: "The Workers Compensation Law was enacted in 1914 to protect workers and their families from loss suffered as a result of injuries sustained in the workplace. Each year many millions of dollars in workers' compensation claims are paid out by our State Insurance Fund and commercial insurance carriers. Most of the claims filed are legitimate. Unfortunately, however, from time to time some are found to have abused the system. And, in the last analysis, the cost of that abuse comes out of the pockets of the consuming public."

The District Attorney added, "Most of the individuals charged today are alleged to have stolen thousands of dollars in workers' compensation benefits by claiming various on the job injuries which prevented them from working and entitled them to benefits. It is charged, however, that while collecting the benefits, they were gainfully employed at various jobs including those that required a high degree of physical activity. In addition, it is alleged that other defendants collected and cashed workers' compensation checks belonging to deceased relatives, defrauded contractors for whom they were performing subcontracting work by providing them with certificates that falsely represented that they had workers' compensation insurance when, in fact, they did not and, finally, in one instance, -- an insurance broker -- is charged with pocketing a client's premiums which should have been paid to the insurance company."

Superintendent Levin said, "New York State is aggressive in its pursuit of those suspected of insurance fraud. In the first quarter of 1999, the Insurance Department's Frauds Bureau has arrested more than 100 people and saved insurers and policyholders $3.5 million. Today's arrests send the message loud and clear. Insurance fraud of any type will not be tolerated."

H. Neal Conolly, the Executive Director of the New York State Insurance Fund, said: "As the largest workers' compensation insurer in New York we are fully committed to getting workers' compensation fraud under control. We are determined to crackdown on fraud of every type, including employer premium fraud. District Attorney Brown has fully supported our efforts to bring those who abuse the system to account. As these arrests show, the problem goes far beyond that of bogus claims. Businesses who cheat on their reports as to the value of their payroll or the type of work performed by their employees avoid their obligation to pay the right premium. This puts an additional economic burden on legitimate companies who are trying to follow the law. We appreciate the leadership role taken by District Attorney Brown in sending a message that those who commit fraud will be vigorously prosecuted."

District Attorney Brown said that today's arrests were the result of a joint investigation by the District Attorney's Economic Crimes Bureau, the District Attorney's NYPD Office Squad, investigators from the Fraud Units of the New York State Insurance Department and the State Insurance Fund in cooperation with representatives of the various commercial insurance carriers involved and the Workers Compensation Board's Inspector General.

According to the charges, one of the largest thefts was committed by 52 year old Joanne Ruczynska of 102-05 56th Avenue, Richmond Hill, New York. She is accused of stealing over $75,000 from the CNA Insurance Company. She claimed to have injured her back, legs, hands and arms pushing a wheelchair in 1992 while she was employed by a home attendant service. It is alleged that despite the claimed injuries, over a five year period beginning in March, 1992, she worked as a cleaning woman in a private residence in Roslyn Heights.

Others charged are:

* Peter Vella, 36, of 67-72 78th Street, Middle Village. A former UPS worker who claimed head and neck injuries disabled him and is accused of stealing $3,733. Seen on video removing tires from an automobile on a lift and rotating them by replacing them onto the lifted car six feet off the ground;

* John Tsigakos, 32, of 107-12 76th Street, Ozone Park worked for Cinelli Carting Co.; claimed back injury and is accused of stealing $27,342. Seen on video carrying bags of cement and bricks on a construction site for his company, JTG Contracting;

* Rodolfo Pereira, 36, of 35-45 81st Street, Jackson Heights. Truck driver for Sumo Containers; claimed back disability and is accused of stealing $25,743. Seen on video picking up food, including two watermelons at one time, loading his van and delivering food to restaurants;

* Rocco La Vacca, 66, 81-26 251st Street, Bellerose, N.Y. A former butcher at Associated Food in Floral Park; claimed carpel tunnel syndrome disability and is accused of stealing $20,270. Seen on video working as a repairman at a vacuum cleaner store in Bellerose and sealing his driveway;

* Joseph Turano, 41, 58-05 75th Street, Elmhurst. Former truck driver; claimed back injury and is accused of stealing $5400. Seen on video carrying large rolled up carpets and cans of glue for family owned store -- Artistic Carpet in Maspeth;

* Savvas Lazaglou, 46, 19-42 77th Street, Flushing. Slipped while working at a florist shop and claimed back disability; accused of stealing $8,742. Seen on video cutting and hauling Christmas trees;

* Gilbert Pabon, 36, of 572 Warren Street, Brooklyn. Claimed to be disabled and is accused of stealing $4,036. Observed delivering food to church pantry;

* Stefanos Papoutsakis, 60, 35-18 161st Street, Flushing. Claimed to be disabled by a heart attack and is accused of stealing $7,650. Observed purchasing and carrying food supplies to his restaurant -- Zygos Restaurant in Astoria;

* Dennis Roman, 35, 1617 Sommerfield Street, claimed disability resulting from working at a McDonald's and is accused of stealing $17,370. Observed working as a security guard at Lane Bryant store in Brooklyn;

* Lu Wen Yu, 58, 31-50 138th Street, Flushing, slipped while working in at the Paramount Hotel and claimed disability; accused of stealing $35,456. Observed working as a teacher at the LP Language Institute.

In five other cases defendants are charged with illegally collecting a total of $84,000 in workers compensation benefits paid to relatives who were deceased. For example, a 57 year old College Point woman, Margaret Lizotte, of 127-11 14th Avenue, allegedly kept and cashed her deceased husband's workers' compensation benefits of $25,520 over a two year period from May 1994 to August 1996. Although, her husband passed away on May 7, 1994, the defendant allegedly told investigators that he was alive and well.

The defendants are all charged with various degrees of insurance fraud, grand larceny and forgery. They face sentences ranging from up to 7 years to up to 15 years in prison, if convicted.

The investigation was carried out by detectives and investigators of the State Insurance Fund under the supervision of the Director of Confidential Investigations Lawrence M. La Pointe and Assistant Director Philip DiSenso, the New York State Department of Insurance under the supervision of the Director of Insurance Frauds Bureau Charles DeRienzo and the office of the Inspector General of the New York State Workers Compensation Board under Assistant Inspector General Vincent Fantozzi and the Queens District Attorney's NYPD Office Squad under the command of Captain Harold J. Knorr and Lieutenant Kenneth Rosello and the District Attorney's Detective Bureau under Chief Edward T. Brady, Lt. Lawrence Festa and Sgt. Ralph Torres. Detectives Joanne Carmel, Terence Quinn, Bari Moody and Jack Maniscalco of the District Attorney's Squad under the supervision of Squad Sgt. Frank Russo and Sr. Investigator Benedict Emengo of the State Insurance Fund and Investigators Anthony De Riso, Joseph Reilly, Frank Pinto, George Capaccio, Regina Wolfe, Solamon Jones, Peter O'Brien, and Rosalind Thomas of the Department of Insurance arrested the defendants early today.

District Attorney Brown acknowledged the cooperation and assistance in the investigation of the following companies: Cigna Insurance Company, Greater New York Mutual Insurance Company, General Accident Insurance Company, Liberty Mutual Insurance Company, John Hancock Insurance Company, Empire Insurance Group, CNA Insurance Company, and The Hartford Insurance Company.

Assistant District Attorney Linda C. LaGreca of District Attorney Brown's Economic Crimes Bureau which is under the supervision of Assistant District Attorney Michael J. Mansfield and the overall supervision of Executive Assistant District Attorney Robert D. Alexander is in charge of the cases.

It should be noted that an arrest is merely an accusation and that a defendant is presumed innocent until proven guilty.

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